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2009 Inventory Reduction Plan Second Half Tactics. Objectives. Reduce discontinued proprietary inventory by 54% or $150,000 Reduce discontinued exclusive inventory that cannot be returned by 33% or $10,000 Reduce financial impact of carrying inventory Free up warehouse space
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Objectives • Reduce discontinued proprietary inventory by 54% or $150,000 • Reduce discontinued exclusive inventory that cannot be returned by 33% or $10,000 • Reduce financial impact of carrying inventory • Free up warehouse space • Offer our customers the opportunity to increase profits • Increase turns of slow moving products • Based on report of 6 months or more on hand as of 12/11/08
Strategies • Utilize discontinued items to provide increased “value” to our customers • Price Reductions • “Free” on-pack promotions • Target specific accounts for items with large quantities on hand • Quantity breaks for larger accounts to take all the inventory • Telemarketing incentives for smaller accounts • Build Company image through donations to appropriate organizations and industry events • Review in fourth quarter to look at additional opportunities
Updated Inventory as of 8/31/09 Proprietary and Exclusive Discontinued Items
Tactic Overview • Focus opportunities: • Trade Shows • Hot Sheet Brochure • Full Service Accounts • Sales Support • Telemarketing Incentives • International • e-commerce Promotions • Will-call Customers • Employee Promotions • Public Relations/Donations
Trade Shows • Les Nouvelles Esthetiques • September 12–14, 2009 – Long Beach, CA • Professionals Only • Sold Hive of Beauty product at 10% over cost • The Salon & Spa Buyers Bazaar • November 8–9, 2009 – Pomona, CA • “Cash & carry” show open to the public • Opportunity to move “retail” items • Sell appropriate products at 10% over cost
Focus Products for Spa Buyers Bazaar Sell below-listed products at 10% over cost. Additional products may be added to list. Pricing being finalized.
Hot Sheet Brochure • Hot Sheets offer the widest customer exposure to discontinued and slow moving items • Select highest volume items for inclusion • Include in brand section to highlight quality • Include in July/August; September/October; November/December
Discount Discount MEHAZ SUNDRIES MEH CUTICLE NIPPER SMALL HANDS 1/4 JAW FLO FILE CATTY HEART HEALTH MC010 FCF-HHD 25% 10% MEH CUTICLE NIPPER SMALL HANDS 1/2 JAW FUL FULL VUE MIRROR BURGUNDY MC011 MR0651BY 25% 19% MEH COMFORT GRIP NIPPER SS 700 1/2 RED FUL FULL VUE MIRROR GRAY MC0702RD MR0651GY 30% 19% MEH COMFORT GRIP NIPPER SS 700 1/4 RED FUL FULL VUE MIRROR MAUVE MC0704RD MR0651MV 30% 19% MEH SS CS LAP CUTICLE CN222 1/2" FUL FULL VUE MIRROR WHITE MC2222 MR0651WH 50% 19% MEH SS CS LAP CUTICLE CN222 1/4" SPI HI DNS APPLCTR NAT 8OZ W/ YRKR 1DZ MC2224 SB31081 50% 50% MEH SS LAP ACRYLIC NIP AN445 CHR 4.25" SPI DISPNSR BTL NAT 4OZ W/ POP-UP 1DZ MC0445 SB40041 45% 30% MEH NK LAP ACRYLIC NIP AN001 4" SPI DISPENSER TUBE W/FLIP TOP CAP 1 DZ MC0100 SB40045 25% 40% MEH SS PUSHER/CLEANER CP120 6" SPI JUST FOR NAILS MANICURE BOWL BLK MC0120 PB0026 15% 40% MEH CORNER NIPPER 4-1/2" SPI JUST FOR NAILS MANICURE BOWL WHT MC0013 PB0029 30% 40% CP 125 SS 4.5 PTERYGIUM RMVR JUS DOUBLE DIPPER 2/PK 9MC0125 JN930 50% 50% PE 121 SS 5" 2 SIDE INGROWN SPI JUST 4 BTY 3PC SET BAG TP-015 9MC0121 JB015 15% 25% MEH SS SLANT DEPIL TWZR DT095 BLK 4" SPI JUST 4 BTY PULL APART COSMETIC BAG MC0095BK JB017 40% 40% MEH BENT TWEEZER STAINLESS SLANTED SPI JUST 4 BTY TRAIN CASE MC0093 JB094 40% 40% MEH TWEEZER 043 SS STRAIGHT TIP JUST FOR BEAUTY KABUKI BRUSH 6/DS MC0043 JB400 40% 35% MEH RUBIS 1K102MH HEART BEAT TWEEZER SS MC0130HB 10% SIGNATURE MEH S CTICL SCISSOR 2067/3.5" CS NKL PLT MS320 40% MEH S NAIL CLEANER 228, 14CM SS MS330 40% MEH S STORK SCISSOR 2416/3.5" CS NKL PLT MS340 40% MEH S TWEEZER 5103,10.5CM NDL NOSE SS MS353 40% MEH S TWEEZER 5104 SS SLANTED/POINTED MS354 40% MEH S TWEEZER 149 WING SLANTED TIP MS355 40% MEH S EYEBROW KIT IN PINK POUCH MS372 40% MEH S CORN CUTTER RF-0403 MS380 40% MEH S TOENAIL 0680/13.5CM SS SPRNG BRL MS390 40% Focus List – July/August 20 page book – packed with July catalog
Focus List – September/October Discount MEHAZ MEH CUTICLE NIPPER SMALL HANDS 1/4 JAW MC010 25% MEH CUTICLE NIPPER SMALL HANDS 1/2 JAW MC011 25% MEH COMFORT GRIP NIPPER SS 700 1/2 RED MC0702RD 30% MEH COMFORT GRIP NIPPER SS 700 1/4 RED MC0704RD 30% MEH SS CS LAP CUTICLE CN222 1/2" MC2222 50% MEH SS CS LAP CUTICLE CN222 1/4" MC2224 50% MEH SS LAP ACRYLIC NIP AN445 CHR 4.25" MC0445 45% MEH SS PUSHER/CLEANER CP120 6" MC0120 15% CP 125 SS 4.5 PTERYGIUM RMVR 9MC0125 50% PE 121 SS 5" 2 SIDE INGROWN 9MC0121 15% MEH SS SLANT DEPIL TWZR DT095 BLK 4" MC0095BK 40% MEH BENT TWEEZER STAINLESS SLANTED MC0093 40% MEH TWEEZER 043 SS STRAIGHT TIP MC0043 40% MEH RUBIS 1K102MH HEART BEAT TWEEZER SS MC0130HB 10% FLO FILE CATTY HEART HEALTH FCF-HHD 10% Smaller book mailed on its own resulted in fewer items being featured
Full Service Accounts • Can take advantage of larger quantities • Provide updated target list to sales department with deeper discounts than published for quantity orders on 10/1/09
Focus List Price at 10% over cost for quantity purchases. Detailed items dependent upon inventory available as of 9/30/09.
Focus List - Mehaz & Signature Detail Discount amounts (10% over cost) and quantity breaks to be determined by inventory levels as of 9/30/09.
Sales Support Activities • Customer Service Week • Program running 10/12-10/16 • Provide target list of items to customer service reps for upsell • Prizes to be awarded for various sales levels • Most items sold • Highest dollars sold • Utilize discontinued items to support in- store events as requested • New store openings • Anniversary celebrations
Focus List Discount amounts (at 10% over cost) and quantity breaks to be determined by inventory levels as of 9/30/09.
Focus List –Signature Implements Discount amounts (at 10% over cost) and quantity breaks to be determined by inventory levels as of 9/30/09.
Small Accounts (under $10,000 annually) • Communicate selected special values and promotional opportunities to Small Accounts via flyers • Target date – Available November 1, 2009 for Holiday selling • Provide to telemarketing, customer service and sales reps for presentation to accounts
Focus List Discount amounts (at 10% over cost) and quantity breaks to be determined by inventory levels as of 9/30/09.
Second Half Telemarketing Incentive Hit ‘N Run Events • Short term (1 week) promotions to encourage focus and excitement on specific items • Minimum sales goal must be met to win • Weeks of 10/5; 10/26; 11/16; 12/7
Second Half Telemarketing Incentive • Shear Madness • Telemarketers focus on discontinued shears • August 17 - 31, 2009 • $5.00 Spiff on specific kit • October 19 – 31, 2009 • Build your own spiff • Provide price for sale • Telemarketers get to keep the difference
Focus List Discounted price (at 10% over cost) and quantity breaks to be determined by inventory levels as of 9/30/09.
International • Continue to offer close out items to appropriate customers • Products and prices tailored to specific customers
e-commerce promotions • Discontinued items marked with “While Supplies Last” icon discounted price points • Effective with activation of B2B site in August 2009
Will-call Customers • Continue to utilize will call area for displaying close out items • Focus on low inventory products to move out entire amount – items dependent on inventory levels • Offer at 10% over cost
Second Half Employee Promotions • Quarterly $1.00 Sale • Select items at $1.00 each • September 30, 2009 and December 11, 2009
Employee Promotions • Sale Table in Warehouse • Expand offerings to customers and employees at low, low prices • Combine products in “kits” to offer greater value • Monthly email and flyer on bulletin boards through end of year reminding employees to check what’s new on the sale table • 10/14/09 • 11/13/09 • 12/15/09
Public Relations • Product Giveaway Programs • Support charitable organizations • Charity Event Gift Bags • Delancy Street and other non-profit organizations/shelters • Support industry competitions and events • July Nails Magazine Freebie of the Month • AACS Show • Visitors Gift • Silent Auction Gift Basket